Clear Debt Solution - Debt Settlement Blog

It's always interesting to hear from prospective clients that have never heard of debt settlement before, and are thrilled when they find out they have a legitimate and honorable alternative to bankruptcy.

There are plenty of people who only believe in giving debt settlement companies a bad name. But what people are unaware of, is there are ethical companies that do exist and whose goal is to help people in need of debt relief.

One major shadow that has been cast on debt settlement companies is greed. It’s thought that all companies are in business to take people's money and run. Rather, noble companies explain their practices, policies, and fees up front and don't keep anything in the dark from their clients so they know what to expect as they go through the process in the program.

Another common delusion people have regarding debt settlement companies, is that they provide limited information. Honest and honorable companies will take the time to explain every available possibility for debtors and leave it up for them to make the decision without trying to force them into the program.

Another misconception is all debt settlement companies have high drop out rates. Trustworthy companies who disclose every detail upfront, however, have very low dropout rates.

Debtors need to understand there are many positive attributes reliable companies possess. Some qualities they have include: sticking with the client until they’ve cleared their debt, educating clients with how to handle collectors, not dropping clients when and if legal action is taken, identifying all programs available for each situation (Credit Card Consolidation, Credit Counseling, Debt Settlement, and Bankruptcy), as well as what to expect with their credit when enrolled and beyond.

For debt settlement companies who truly want to help people, it remains an uphill battle when dishonest companies keep giving them a bad name.

A commonly asked question in the debt settlement industry is, "What is the difference between secure debt and unsecured debt?" The answer is simple!

Secured debt can be defined as any debt attached to property or collateral. Items that can be included as secured debt include Auto Loans, Debts at Law Offices, Home/Real Estate Loans, IRS Tax Debts, and Student Loans.

Secured debt can offer lower interest rates. Secured debt might also cause borrowers to learn how to budget rather quickly as to not loose the attached property or collateral. A downside to secured debt however, might occur when the lender knows they could benefit from the monetary relationships they develop with borrowers. Thus, the lender will allow the borrower to negotiate a payback rate and take out more cash upfront.

Unsecured debt can be defined as any debt not attached to property or collateral. Items that can be included as unsecured debt include Auto Repossessions, Collection Accounts, Commercial Debts, Credit Cards, Judgments, Medical Bills, Personal Lines of Credit, Retail Store Cards, and Unsecured Loans.

Unsecured debt can be a bit more tricky than secured debt. Unsecured debt occurs when a lender loans the borrower money without having the security of attached property or collateral. This type of debt presents a higher risk for lenders which therefore presents a more expensive loan for borrowers. In addition, the more risk a lender takes on will increase the interest rate a borrower must pay back on top of the principle.

Thus, unsecured debts become destined to higher rates than do secured debts. Due to the attachment of property and collateral, debt can vary between secured and unsecured. Secured debt presents more safety to the lender, but unsecured debt presents more safety to the borrower because they are not placing any risk on any attached possessions.

What most people who are drowning in debt don't realize, is that there is another option to gain financial freedom that is fairly new in the game. This option is known as debt settlement. It can be defined as the fastest and least expensive way to get out of debt.

Debt settlement is fairly young in the industry, but it is an option that is very promising. Debt settlement offers debtors the opportunity to enroll all their unsecured debts into one program. They set up an account where they make payments to themselves. Once these accounts have reached a certain amount, the debtor and debt settlement company make an agreement with the creditor in which they pay off the debt. Typically, the debtor saves around 40-60% of their original debt.

Although there are positive attributes that define debt settlement, there are also negative elements to consider and understand. When you enroll with a debt settlement company, you will have negative marks and late reporting on your credit report. However, when you do make these lump payments and pay off the creditors, you are repairing your credit by showing your dedication of paying off those debts.

Another risk to consider is the risk of being sued. This is true because throughout the program, you are no longer making your minimum payments and the creditors might seek a lawsuit in order to make their money back. There is a small chance of being sued, but a risk to be addressed nonetheless.

Before deciding to use debt settlement, weigh all the positive and negative facets of debt settlement. Among the many various options for debt relief, debt settlement can be very promising. It has been proven to help people regain financial state of mind and reestablish their credit. Altogether, debt settlement can be the right fit for people seeking to get out of and stay out of debt, they just have to be one hundred percent committed to the program

Throughout the last four years or so, negotiation of debt has become more and more popular. Ever since new laws pertaining to bankruptcy evolved in 2005, debt negotiation has been on the rise. Also known as debt settlement, debt negotiation has been helping otherwise bankruptcy bound clients, find their way out of the debt they've accumulated for themselves. So, it comes at no surprise that you ought to place careful consideration into which negotiation company to use. Therefore, it is imperative to decipher the honesty companies from the dishonest ones.

Tracking a good company involves much thought, as well as conclusive research. If choosing to enable the services of debt settlement, make sure to cross reference your choice of company with the Better Business Bureau and The Association of Debt Settlement websites. Both BBB and TASC are reputable agencies that employ proper procedures are being followed by companies.

Following this simple rule will ensure the success of your negotiations done by your debt settlement company. Have faith and keep your head up on your journey through debt relief and debt settlement.

So, who's the best, and how do you know? What if one company tells you one thing, and another contradicts that information and provides a whole other side to the story?

Quality practices and honest processes are recognized through the Better Business Bureau (bbb) and The Association of Settlement Companies (tasc).

Of course, you'll also want to price which company you are looking to use. Weigh their fees on what they provide, how dedicated to helping debtors. It is a good rule of thumb to charge a portion of their fees on the quality performance they provide its customers. And by performance I mean how low they can settle for you. The lower the settlement the more money the debtor saves. Too many companies out there charge a flat percentage of the total debt amount and collect all of it upfront before settlements are reached. This fee setup does not leave much incentive for the negotiator to attain the best settlement, as they've already earned all their money. If and when negotiators work off their performance, a better settlement will be reached and thus they'll earn more by saving their clients more. So when approaching a settlement operation as such, the ending result is a win win situation among both debtor and negotiator.

One danger to keep your eye open for is whether a company is under investigation by the Attorney General. It is always wise to look up the Attorney General's office for whichever state the company of your choice resides in. The reason is because you should determine if they are under investigation or not, and if it is, then stay away from that choice.

And of course a good debt negotiation service should have a very capable and friendly client services department, that is capable of handling the day to day operations of the business. Way to many companies neglect to really improve and take pride in their client services resulting in the client not getting what he or she thought they were going to get.